RBI to keep repo rate unchanged at 5.5%: Governor Malhotra

New Delhi: Reserve Bank Governor Sanjay Malhotra on Wednesday announced the Monetary Policy Committee (MPC) decision to keep the repo rate unchanged at 5.5%.

This comes after the RBI reduced the rate by a massive 50 basis points (BPS) in the previous MPC meeting, taking the total rate cut in 2025 to 100 bps.

Also, this is the first time since December 2024 that the RBI has decided to keep the interest rates unchanged.

Announcing the third bi-monthly monetary policy of this fiscal, Governor Malhotra said, "Monetary Policy Committee (MPC) decided to continue with a neutral stance, and will keep rates unchanged at 5.5%"

He further added, "Core inflation has remained steady as expected at 4%, above normal monsoon, lower inflation continues to support economic activity".

On further not reducing the repo rates, Malhotra said, "The impact of 100 bps rate cut is still unfolding".

The RBI has retained the GDP growth forecast for the current fiscal year at 6.5%, with risks evenly balanced and geopolitical tensions posing headwinds.

The central bank has been tasked by the government to ensure that consumer price index (CPI) based retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

Based on the recommendation of the MPC, the RBI reduced the repo rate by 25 bps each in February and April, and 50 basis points in June, amidst easing retail inflation.

The retail inflation is trending below 4 per cent since February this year, but experts opine that the RBI would wait for more macro data before changing the existing repo rate of 5.5 per cen,t notwithstanding headwinds caused by tariffs announced by US President Donald Trump on imports of Indian goods.

The MPC consists of three RBI officials - Sanjay Malhotra (Governor), Poonam Gupta (Deputy Governor), Rajiv Ranjan (Executive Director) and three external members - Nagesh Kumar (Director and Chief Executive, Institute for Studies in Industrial Development, New Delhi), Saugata Bhattacharya (Economist), Ram Singh (Director, Delhi School of Economics).